Does this mean we'll see less fluctuation in the stock as the mix of investors will change (away from institution and hedge fund)? I'm trying to understand Apple's rational behind this.
Does this mean we'll see less fluctuation in the stock as the mix of investors will change (away from institution and hedge fund)? I'm trying to understand Apple's rational behind this.
We might less of those drastic fluctuations, but there are a lot of reasons why a company might opt for stock splits. This is usually done when a stock price can't attract more buyers of the stock because stocks are typically bought in block of a 100 shares, so if you wanted to buy Apple stock you'd have to spend 100 x $535 = $53,500. Most average working class people that invest money in the market can't just buy $54K worth of stock at once. But they can better afford to buy $7600 worth at once.
Now, typically Apple was doing 2 for 1 stock splits when it hit $100 a share, but for whatever reason, they didn't continue that trend, so they kept it rising and rising until it reached a point where it doesn't really move. Obviously, paying dividends is one way to attract buyers and to KEEP those shareholders to prevent lots of sell offs.
Now, If you look at Microsoft, they were doing stock splits routinely until around 2000 and then they just stayed at that $30 range. But the company hasn't really done much in terms of growth. Microsoft also has about 8.5 Billion shares outstanding whereas Apple before today, only had about 900 Million shares, so Apple wasn't as diluted.
If you look at Google, they only had about 330 Million shares before they did their recent stock split. Why they want to keep their price so high to avoid average people to invest is beyond me.
I think it was a good move for Apple to do a stock split, I actually think they should have been doing this every time they hit $100 a share instead of waiting so long, but it is what it is.
Now they increased their stock buyback so they can repurchase some of those shares back when they need to. The problem they want to avoid is being too diluted. I think that's Microsoft's problem. Apple is very similar in the number of shares outstanding, but at least Apple has far more profit per share than Microsoft. We just have to hope that Apple doesn't products products that lose margin like Microsoft's been doing with their Xbox, Zune, Surface products OR waste Billions of dollars on turkey companies.
I certainly wasn't expecting a 7 for 1 split. Maybe a 3 for 1 at the most, but this should be good for the stock value as it will attract more buyers (hopefully) that will hang onto the stock because of the dividends, which may increase down the road.
I do _NOT_ pity the poor fools who shorted APPL today before the news. "They" are all the usual whining market manipulators who try to tank the stock every quarter because they are unhappy that APPL only sold 50 million iPhones, when of course Apple should have sold 60 million according to their Wall Street Guesstimates. Let them eat their APPL 'shorts' today!
You do realize that WST will be titling "Apple doomed" tomorrow as usual? It is all about milking the cow, not about the news
Does this mean we'll see less fluctuation in the stock as the mix of investors will change (away from institution and hedge fund)? I'm trying to understand Apple's rational behind this.
Apple would have started buying during or after the conference call, historically this has been when the misled gullible start dumping their stock.
Tomorrow things will heat up and Apple got a huge discount on their buy back.
Funny. Here was my reply from Investor Relations apple in May 2012 when I pleaded with them to split the stock. This is a copy and paste from my saved email as I knew he would do a 180.
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When we announced the dividend and stock repurchase plan in March, our CEO, Tim Cook was asked about splitting the stock and here was his reply:
This is something that we have looked at while we were looking at this cash question. And the current information we have would suggest that there's very little support that it helps the stock. However, we are in a unique position and at a unique point in time, and so this is something that we continue to look at. And if we reached a decision that we thought it was in the best interest of Apple and its shareholders, we would do it. But again, at this point that's not how we see it.
I don't have anything new to update you with today, but wanted you to have our latest public thoughts on the matter.
a 7 for 1 split will give you 6 additional shares for every share you own. the split takes place in June and trading at the split adjusted share price will begin on June 9th. for those who need an explanation, that means that the new price will be 1/7 of the closing price at the time of the split.... there is no loss in value nor loss in your investment due to the split.
Does this mean we'll see less fluctuation in the stock as the mix of investors will change (away from institution and hedge fund)? I'm trying to understand Apple's rational behind this.
Makes the stock look like it's more affordable to the average investor. That's about it.
People who could not afford $524.75 shares could drive up the price by buying $74.96 shares, or their impact could be insignificant.
According to Yahoo finance, institutional ownership of AAPL is 62% today. Let's see how that changes after the split.
With stock broker fees around $10 or so, it makes sense to buy at least $2000 of any security to avoid spending too much of a percentage in fees. (A round trip trade would be 1% in fees) At the old price it was about 4 shares. A split would only be needed after $1000 but I still support it for psychological value.
island hermit 7 for 1? Later it says 6 for 1. More than likely 7 for 1.
You will receive 6 additional shares for every on that you already own giving you a total of 7. At the same time, in theory, the share price should drop to 1/7 of the price prior to the split as the share price x the number of shares = the market capitalization. In other words the company is worth the same after the split as before. In practice however, stock prices often rise after a split for a number of reasons one of which is that the stock is more attractive to some investors as it has a lower price.
I hear that argument a lot, but I'm not sure if I agree with it.
If somebody couldn't afford $500 a share, then some small investor buying a few shares for $80 won't make much difference in my opinion. It's the big players that count. The small investor doesn't mean crap.
I am not sure I buy it either. Moreover, even if it is true, small time investors mean more skittish people to sell at every little bit of percived negative further putting a drain on the stock. However, the truth is most stocks, or at least Apple, has traditionally took a significant up tick at the news of the split, so after the split the stock is traditionally higher than before the split was announced.
If you are a long turn investor, Apple is a great investment. Apple has no debt, pays a dividend, and is taking shares off the market.
I hope Apple bought up every share the idiots taken in by Wall St, foolishly dumped.
So how long until the split shares hit $100?
What are you talking about?
I don't think you understand how this works.
Apple issues a stock split, so all EXISTING share holders get 7 shares for each 1 share they own, but the stock price per share goes down accordingly so shareholders STILL have the same dollar amount. What stocks splits do is that it spurts more buy order than sell orders, which effectively pushes up the price per share. More buyers than sellers means increase in stock price. More sellers than buyers means lower stock price. After the stock split takes place, then more people should be attracted to buying the stock because it's more affordable and since it pays decent dividends, it doesn't take that long to make some money off the stock even if the stock doesn't go up in share value, because Apple hands you some cash or increases the amount of shares you own every month. Many people opt for dividend reinvestment.
Now, what Apple also announced is the ability to buy back up to $90 BILLION shares. Is Apple going to do that today? NO. They will do that if the stock goes down and creates a buying opportunity. It's actually contradictory, but it's how they can help keep the value of the stock in a range that makes sense.
You might want to take a course in investments or at least get a good, easy to read book on stock investments, they explain a lot of the fundamentals of this sort of concept of stock splits, dividends, dividend reinvestment, stock buybacks, etc.
I am not sure I buy it either. Moreover, even if it is true, small time investors mean more skittish people to sell at every little bit of percived negative further putting a drain on the stock. However, the truth is most stocks, or at least Apple, has traditionally took a significant up tick at the news of the split, so after the split the stock is traditionally higher than before the split was announced.
If you are a long turn investor, Apple is a great investment. Apple has no debt, pays a dividend, and is taking shares off the market.
Actually Apple took on some debt last year. If you look at the June 29, 2013 quarter Balance Sheet, they took on about $17 Billion in debt. If I remember correctly, I think they did this to pay dividends instead of bringing cash into the country from Ireland which would have cost them a bunch in taxes, so this way it creates some debt and the interest they pay for the debt is a write down. I'm sure it was the better option if you ran the numbers. Apple is already one of the largest corporate tax payers. I think if you were in the same position as an individual, you'd probably do the same thing.
Apple would have started buying during or after the conference call, historically this has been when the misled gullible start dumping their stock.
Tomorrow things will heat up and Apple got a huge discount on their buy back.
I don't believe they are actually BUYING back shares, the stock is up about $49 a share in after hours trading. They just increased the amount of money they WOULD use for share buy back. That doesn't mean they actually BOUGHT the shares. I think they are just using it if the stock tumbles and creates a buying opportunity. When a company announces a buyback, they don't necessarily buy those shares the day they announce it. You have to REALLY pay attention to exactly what they said. They've announced buy backs before, but didn't exercise it for months later.
a 7 for 1 split will give you 6 additional shares for every share you own. the split takes place in June and trading at the split adjusted share price will begin on June 9th. for those who need an explanation, that means that the new price will be 1/7 of the closing price at the time of the split.... there is no loss in value nor loss in your investment due to the split.
Seriously, unless you have some formal training in the stock market, finance, and some actual experience understanding this stuff, it would be better to keep your mouthes shut. There is a LOT of misleading information people are spitting out.
I'm not an analyst or a stock broker, but I have a degree in Finance, have taken investment classes and got A's all the way through and have been analyzing stocks since around 1969 when I was around 10 years old and my father gave me a book on investing because I showed an interest in it. You guys have to understand how to read various financial reports, understand investments, what these guys are talking about and what REALITY is vs what you THINK you heard or understand.
If you don't have any experience, college education or real understanding of this stuff, it would be better if you asked questions instead of putting out misleading information.
Comments
Does this mean we'll see less fluctuation in the stock as the mix of investors will change (away from institution and hedge fund)? I'm trying to understand Apple's rational behind this.
We might less of those drastic fluctuations, but there are a lot of reasons why a company might opt for stock splits. This is usually done when a stock price can't attract more buyers of the stock because stocks are typically bought in block of a 100 shares, so if you wanted to buy Apple stock you'd have to spend 100 x $535 = $53,500. Most average working class people that invest money in the market can't just buy $54K worth of stock at once. But they can better afford to buy $7600 worth at once.
Now, typically Apple was doing 2 for 1 stock splits when it hit $100 a share, but for whatever reason, they didn't continue that trend, so they kept it rising and rising until it reached a point where it doesn't really move. Obviously, paying dividends is one way to attract buyers and to KEEP those shareholders to prevent lots of sell offs.
Now, If you look at Microsoft, they were doing stock splits routinely until around 2000 and then they just stayed at that $30 range. But the company hasn't really done much in terms of growth. Microsoft also has about 8.5 Billion shares outstanding whereas Apple before today, only had about 900 Million shares, so Apple wasn't as diluted.
If you look at Google, they only had about 330 Million shares before they did their recent stock split. Why they want to keep their price so high to avoid average people to invest is beyond me.
I think it was a good move for Apple to do a stock split, I actually think they should have been doing this every time they hit $100 a share instead of waiting so long, but it is what it is.
Now they increased their stock buyback so they can repurchase some of those shares back when they need to. The problem they want to avoid is being too diluted. I think that's Microsoft's problem. Apple is very similar in the number of shares outstanding, but at least Apple has far more profit per share than Microsoft. We just have to hope that Apple doesn't products products that lose margin like Microsoft's been doing with their Xbox, Zune, Surface products OR waste Billions of dollars on turkey companies.
I certainly wasn't expecting a 7 for 1 split. Maybe a 3 for 1 at the most, but this should be good for the stock value as it will attract more buyers (hopefully) that will hang onto the stock because of the dividends, which may increase down the road.
So how long until the split shares hit $100?
You do realize that WST will be titling "Apple doomed" tomorrow as usual? It is all about milking the cow, not about the news
Apple would have started buying during or after the conference call, historically this has been when the misled gullible start dumping their stock.
Tomorrow things will heat up and Apple got a huge discount on their buy back.
Funny. Here was my reply from Investor Relations apple in May 2012 when I pleaded with them to split the stock. This is a copy and paste from my saved email as I knew he would do a 180.
------------
Does this mean we'll see less fluctuation in the stock as the mix of investors will change (away from institution and hedge fund)? I'm trying to understand Apple's rational behind this.
Makes the stock look like it's more affordable to the average investor. That's about it.
I hope Apple bought up every share the idiots taken in by Wall St, foolishly dumped.
So how long until the split shares hit $100?
Maybe not so far off, now that Tim has explicitly said they're getting into new markets. Exciting times here we come again!
People who could not afford $524.75 shares could drive up the price by buying $74.96 shares, or their impact could be insignificant.
According to Yahoo finance, institutional ownership of AAPL is 62% today. Let's see how that changes after the split.
With stock broker fees around $10 or so, it makes sense to buy at least $2000 of any security to avoid spending too much of a percentage in fees. (A round trip trade would be 1% in fees) At the old price it was about 4 shares. A split would only be needed after $1000 but I still support it for psychological value.
7 for 1?
Later it says 6 for 1.
More than likely 7 for 1.
You will receive 6 additional shares for every on that you already own giving you a total of 7. At the same time, in theory, the share price should drop to 1/7 of the price prior to the split as the share price x the number of shares = the market capitalization. In other words the company is worth the same after the split as before. In practice however, stock prices often rise after a split for a number of reasons one of which is that the stock is more attractive to some investors as it has a lower price.
I hear that argument a lot, but I'm not sure if I agree with it.
If somebody couldn't afford $500 a share, then some small investor buying a few shares for $80 won't make much difference in my opinion. It's the big players that count. The small investor doesn't mean crap.
I am not sure I buy it either. Moreover, even if it is true, small time investors mean more skittish people to sell at every little bit of percived negative further putting a drain on the stock. However, the truth is most stocks, or at least Apple, has traditionally took a significant up tick at the news of the split, so after the split the stock is traditionally higher than before the split was announced.
If you are a long turn investor, Apple is a great investment. Apple has no debt, pays a dividend, and is taking shares off the market.
I hope Apple bought up every share the idiots taken in by Wall St, foolishly dumped.
So how long until the split shares hit $100?
What are you talking about?
I don't think you understand how this works.
Apple issues a stock split, so all EXISTING share holders get 7 shares for each 1 share they own, but the stock price per share goes down accordingly so shareholders STILL have the same dollar amount. What stocks splits do is that it spurts more buy order than sell orders, which effectively pushes up the price per share. More buyers than sellers means increase in stock price. More sellers than buyers means lower stock price. After the stock split takes place, then more people should be attracted to buying the stock because it's more affordable and since it pays decent dividends, it doesn't take that long to make some money off the stock even if the stock doesn't go up in share value, because Apple hands you some cash or increases the amount of shares you own every month. Many people opt for dividend reinvestment.
Now, what Apple also announced is the ability to buy back up to $90 BILLION shares. Is Apple going to do that today? NO. They will do that if the stock goes down and creates a buying opportunity. It's actually contradictory, but it's how they can help keep the value of the stock in a range that makes sense.
You might want to take a course in investments or at least get a good, easy to read book on stock investments, they explain a lot of the fundamentals of this sort of concept of stock splits, dividends, dividend reinvestment, stock buybacks, etc.
I am not sure I buy it either. Moreover, even if it is true, small time investors mean more skittish people to sell at every little bit of percived negative further putting a drain on the stock. However, the truth is most stocks, or at least Apple, has traditionally took a significant up tick at the news of the split, so after the split the stock is traditionally higher than before the split was announced.
If you are a long turn investor, Apple is a great investment. Apple has no debt, pays a dividend, and is taking shares off the market.
Actually Apple took on some debt last year. If you look at the June 29, 2013 quarter Balance Sheet, they took on about $17 Billion in debt. If I remember correctly, I think they did this to pay dividends instead of bringing cash into the country from Ireland which would have cost them a bunch in taxes, so this way it creates some debt and the interest they pay for the debt is a write down. I'm sure it was the better option if you ran the numbers. Apple is already one of the largest corporate tax payers. I think if you were in the same position as an individual, you'd probably do the same thing.
Apple would have started buying during or after the conference call, historically this has been when the misled gullible start dumping their stock.
Tomorrow things will heat up and Apple got a huge discount on their buy back.
I don't believe they are actually BUYING back shares, the stock is up about $49 a share in after hours trading. They just increased the amount of money they WOULD use for share buy back. That doesn't mean they actually BOUGHT the shares. I think they are just using it if the stock tumbles and creates a buying opportunity. When a company announces a buyback, they don't necessarily buy those shares the day they announce it. You have to REALLY pay attention to exactly what they said. They've announced buy backs before, but didn't exercise it for months later.
I hope Apple bought up every share the idiots taken in by Wall St, foolishly dumped.
So how long until the split shares hit $100?
Go look it up
http://investor.apple.com/faq.cfm?FaqSetID=2
Yes, that will clear it up for people who think AAPL was going to grant stock owners the shares they already owned. :rolleyes:
Seriously, unless you have some formal training in the stock market, finance, and some actual experience understanding this stuff, it would be better to keep your mouthes shut. There is a LOT of misleading information people are spitting out.
I'm not an analyst or a stock broker, but I have a degree in Finance, have taken investment classes and got A's all the way through and have been analyzing stocks since around 1969 when I was around 10 years old and my father gave me a book on investing because I showed an interest in it. You guys have to understand how to read various financial reports, understand investments, what these guys are talking about and what REALITY is vs what you THINK you heard or understand.
If you don't have any experience, college education or real understanding of this stuff, it would be better if you asked questions instead of putting out misleading information.
Yes, that will clear it up for people who think AAPL was going to grant stock owners the shares they already owned.
What the fu*k is your problem?